Thursday, April 21, 2016

Cost benefit analysis of administrative policies

Administrators and senior management seem to love coming up with new policies and procedures for everything.
These are designed to make things "better".
However, a colleague recently emphasised to me that each one of these initiatives should be subject to a cost-benefit analysis. This is a point I have also heard made by my UQ law colleague, James Allen, author of a provocative essay about Australian universities.

Consider the follow examples:

* requiring grant applications to provide more information (whether reports on previous grants, details about university policies, longer project descriptions, relevance to society, ....)

* more details in course profiles

* larger committees to ensure more input, consultation, representation of diversity, accountability, and expertise

* procedures and policies to increase transparency and accountability

* broadening eligibility criteria so more people can apply for a particular grant or fellowship program.

Every one of these initiatives has benefits. 
So why might they be a bad idea?
One needs to consider the cost, particularly the opportunity cost.

Specifically, if instead of faculty spending time on these tasks what might they spend time on instead?
Mentoring graduate students and postdocs, research, preparing higher quality lectures, ....
Sometimes senior faculty simply move these tasks to junior faculty, graduate students, or junior administrative staff. However, that has a cost too. Implementing all these initiatives requires more admin staff; money that could be spent instead on hiring more faculty...

It is not just time and money. All this admin. takes mental space and sometimes reduces morale, which in the end leads to reduced productivity.


  1. Ross, I agree. As a department head, I am the recipient of many policies and requests from "above" that I suppose are aimed at making something better.

    A severe challenge to the idea of doing a cost-benefit analysis in many cases is that the cost and benefit are associated with different groups of people, and typically the people perceiving the benefit are driving the policy.

    1. David,
      Thanks for the comment. I think this is an important insight. A concrete example, is that managers benefit from having more information to make a decision. However, the cost is born by the underlings who have to provide this information.

      Furthermore, it is furthermore that the career costs and benefits are sometimes opposite for the parties involved. Unfortunately, in Australia it seems that university managers advance their careers by starting new programs, "restructuring" existing ones, and increasing the size of their support staff. Real academics then waste time adapting and money that could have provided or enhanced careers of young people is frittered away on hiring more administrators to implement the new programs.

  2. and I think an argument against this good idea by the people above will often be that a (proper) cost-benefit analysis costs too much... Especially when they mostly see (that it is "evident" that there is) a benefit, and not so much that there is a cost.